- Every plan is required by law to designate an administrator who must in turn provide you with key facts about your retirement plan. For some facts, however, you will need to inquire in writing. Upon written request, those additional facts should be provided to you.
- Your plan administrator must provide you with a document called a Summery Plan Description, or SPD. If you are a participant in – or receiving benefits under – an ERISA- covered retirement plan, you should receive a free SPD. You should not have to request an SPD, as your administrator should send one to you automatically when you become a member. If they don’t, contact them and/or us or the Department of Labor and let them know.
- The Summary Plan Description tells you what the plan provides and how it operates. It tells you when you begin to participate in the plan, how your service and benefits are calculated, when your benefit becomes vested, when you will receive payment and in what form, and how to file a claim for benefits.
- If a plan is changed, you must be informed, either through a revised Summery Plan Description, or in a separate document, called a Summary of Material Modifications, which also must be given to you free of charge.
- In addition to the Summary Plan Description, the plan administrator must automatically give you each year a copy of the plan’s Summery Annual Report. This is a summary of the annual financial report that most retirement plans must file the Department of Labor. These reports are filed on government forms called Form 5500. The Summary Annual Report is available to you at no cost.
- In addition to the Summery Annual Report, you may also ask your plan administrator for a copy of the Annual Report in its entirety.
- If you have information that plan assets are being mismanaged or misused, call us or inform the Employee Benefits Security Administration at 1-866-444-EBSA.
Remember, a plan administrator, financial advisor and trustee “fiduciaries.” Fiduciaries owe the highest obligation to the plan and its beneficiaries. Fiduciaries must act in the best interest of the plan and its beneficiaries. Reasonable care is not sufficient. Self serving activities or management is not acceptable.
- The administrator and advisor must act solely in the interest of the plan participants and their beneficiaries, with the exclusive purpose of providing benefits to them.
- The administrator and advisor must carry out their duties with skill, prudence and diligence.
- The administrator and advisor must follow the plan documents.
- The administrator and advisor must diversify plan investments.
- The administrator and advisor must avoid conflicts of interest.
- The administrator also is responsible for selecting the investment providers and the investment options, and for monitoring their performance. Some plans, such as most 401(k) or profit sharing plans, can be set up to permit participants to choose the investments in their accounts (within certain investment options provided by the plan). If the plan is properly set up to give participants control over their investments, then the fiduciary is not liable for the losses resulting from the participant’s investment decisions. Department of Labor rules provide guidance designed to make sure participants have sufficient information on the specifics of their investment options so they can make informed decisions. This information must include:
a) A description of each investment option, including the investment goals, risk, and return characteristics;
b) Information about any designated investment managers;
c) An explanation of when and how to request changes in investments, plus any restrictions on how you can change investments;
d) A statement of fees that may be charged to your account when you change investment options or buy and sell investments; and
e) The name, address, and telephone number of the plan fiduciary or other person designated to provide certain additional information on request.
A statement that the plan is intended to follow the Department of Labor rules and that the fiduciaries may be relieved of liability for losses that are the direct and necessary result of a participant’s investment instructions also must be included.